Hi all,
An employee of our establishment who has rendered 10 years of service has resigned. During his full and final settlement, there is an amount of Rs. 40,000 due which he needs to pay to the company. Is there any possibility of recovering the above-said amount from his Provident Fund contributions as he cannot pay? If yes, can you please help me with the procedure for the same? :-P
From India, Hyderabad
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An employee of our establishment who has rendered 10 years of service has resigned. During his full and final settlement, there is an amount of Rs. 40,000 due which he needs to pay to the company. Is there any possibility of recovering the above-said amount from his Provident Fund contributions as he cannot pay? If yes, can you please help me with the procedure for the same? :-P
From India, Hyderabad
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Dear,
There is no possibility of recovering the amount from his Provident Fund contributions. In my opinion, the PF Act of 1952 does not have such a provision for deduction or recovery of the advance amount given by the employer.
From India, Delhi
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422There is no possibility of recovering the amount from his Provident Fund contributions. In my opinion, the PF Act of 1952 does not have such a provision for deduction or recovery of the advance amount given by the employer.
From India, Delhi
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Dear Satyanaryana,
Have you worked out leave encashment and gratuity? If it is there, you can retain that amount as a loan recovery. The option is that you can ask the employee to give a cheque for the balance amount from the same bank to which they provided the account number for withdrawal of PF.
Regards,
Prabhakar Rao.M
From India, Delhi
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Have you worked out leave encashment and gratuity? If it is there, you can retain that amount as a loan recovery. The option is that you can ask the employee to give a cheque for the balance amount from the same bank to which they provided the account number for withdrawal of PF.
Regards,
Prabhakar Rao.M
From India, Delhi
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No, you cannot touch his PF. If possible, you can recover it through his gratuity and leave encashment.
In some companies, there are policies like holding the salary in the particular month in which the employee is leaving the organization. Sometimes, the salary is given, but incentives are put on hold.
You can do one thing: prepare the final receipt and show his liability to the company. Tell him that we can process your gratuity, PF withdrawal, and relieving letter only after receiving a Rs. 40,000/- cheque.
For the future, if a person has a loan or any pending issues, then put his salary on hold and give a certain time period for the full and final cheque. This way, in case any employee needs recovery, you have the option to recover it from salary, bonus, leave encashment, etc.
However, recovering from PF is not a good option.
From India, Mumbai
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In some companies, there are policies like holding the salary in the particular month in which the employee is leaving the organization. Sometimes, the salary is given, but incentives are put on hold.
You can do one thing: prepare the final receipt and show his liability to the company. Tell him that we can process your gratuity, PF withdrawal, and relieving letter only after receiving a Rs. 40,000/- cheque.
For the future, if a person has a loan or any pending issues, then put his salary on hold and give a certain time period for the full and final cheque. This way, in case any employee needs recovery, you have the option to recover it from salary, bonus, leave encashment, etc.
However, recovering from PF is not a good option.
From India, Mumbai
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dear legally ,even you can not recover from gratuity.i am not able to understand why so much amount recoverable from him. j s ma;ik
From India, Delhi
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From India, Delhi
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Hi , Only u can recover the due amount from his leave enchasement , the rest Grauity and PF cant be recovered in full and final as per the law . Regards sujatha
From India, Bangalore
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From India, Bangalore
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Dear,
What is the amount due so high? On what account is it due to the company? Let me tell you, there is no provision in the PF Act to recover any amount from an employee. I agree with Mallik ji.
Regards,
B. Dakshina Mruty
From India, Hyderabad
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What is the amount due so high? On what account is it due to the company? Let me tell you, there is no provision in the PF Act to recover any amount from an employee. I agree with Mallik ji.
Regards,
B. Dakshina Mruty
From India, Hyderabad
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Dear Satyanarayana,
I fully agree with Mr. Malik and Ms. Sujata. You can't touch the amount of PF and Gratuity of any employee as per the law. You have only the option to recover the amount from his Leave Encashment, Notice Pay, etc., because you better know your company policy at the time of F&F.
Regards,
Shailendra Gupta
From India, Delhi
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I fully agree with Mr. Malik and Ms. Sujata. You can't touch the amount of PF and Gratuity of any employee as per the law. You have only the option to recover the amount from his Leave Encashment, Notice Pay, etc., because you better know your company policy at the time of F&F.
Regards,
Shailendra Gupta
From India, Delhi
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I am afraid you cannot recover any such outstanding amounts from PF or from the employee's Gratuity. Yes, it is a common practice to put the current month's salary "ON HOLD" as soon as an employee resigns. While calculating his dues in Full & Final, the outstanding amount may be recovered from his payable dues.
There is a practical solution to handle such cases. You may take an undertaking from him in writing, whereby he authorizes the management to recover the outstanding amounts from his Gratuity. Once the written authorization has been obtained, the money can be recovered from his payable Gratuity. The Undertaking may be executed on a Rs.100/- Non-Judicial Stamp paper, and the same may be witnessed and notarized as a measure of abundance caution.
Best Wishes, Vasant Nair
From India, Mumbai
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There is a practical solution to handle such cases. You may take an undertaking from him in writing, whereby he authorizes the management to recover the outstanding amounts from his Gratuity. Once the written authorization has been obtained, the money can be recovered from his payable Gratuity. The Undertaking may be executed on a Rs.100/- Non-Judicial Stamp paper, and the same may be witnessed and notarized as a measure of abundance caution.
Best Wishes, Vasant Nair
From India, Mumbai
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Hi All, No Bank nor the company can touch the PF of any employee. The act clearly states this. Rgds Naresh
From India
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From India
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Dear Sathya,
We don't have any right to deduct the amount of salary advance from the P.F and as well as Gratuity because it is part of Statutory compliance. We can recover from full and final settlement through (Leave encashment or Hold salary or Eligible reimbursement) settlement. Other than that, we can't do anything. One more thing, is 40k the salary advance or what? Whenever an employee quits their job, ask them to fill out Exit forms which consist of the reason for leaving and any advance payment details. Ask them to get the signature from the immediate Manager. That will help us to function the process very well. It's my advice.
From India, Madras
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We don't have any right to deduct the amount of salary advance from the P.F and as well as Gratuity because it is part of Statutory compliance. We can recover from full and final settlement through (Leave encashment or Hold salary or Eligible reimbursement) settlement. Other than that, we can't do anything. One more thing, is 40k the salary advance or what? Whenever an employee quits their job, ask them to fill out Exit forms which consist of the reason for leaving and any advance payment details. Ask them to get the signature from the immediate Manager. That will help us to function the process very well. It's my advice.
From India, Madras
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You may hold payment of PF until he pay dues to the company. PF clearance, withdrawal, transfer is only possible when you clear the papers from your end. So ask money then release the papers. hashmi
From India, Delhi
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From India, Delhi
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Dear,
The legal provision is very clear that neither from PF dues nor from gratuity amount, the dues can be recovered. There is a way out to recover it from the gratuity amount. Take a pre-receipt for the total gratuity amount but actually pay the net amount after deduction. Before that, take authorization for deducting the due amount. In the case of PF, take a cheque for the due amount from the employee and tie up with the PF office and his bank so that when the PF amount is deposited, this amount is debited from his account and credited to you. This could be worked out and I have done it.
Regards,
KK Nair
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The legal provision is very clear that neither from PF dues nor from gratuity amount, the dues can be recovered. There is a way out to recover it from the gratuity amount. Take a pre-receipt for the total gratuity amount but actually pay the net amount after deduction. Before that, take authorization for deducting the due amount. In the case of PF, take a cheque for the due amount from the employee and tie up with the PF office and his bank so that when the PF amount is deposited, this amount is debited from his account and credited to you. This could be worked out and I have done it.
Regards,
KK Nair
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In the final settlement calculation sheet, we can mention Gratuity, Leave encashment amount in the ADD part, and whatever the amount or assets due from him/her value we mention in the deduction part. So that the final conclusion should be Earnings. Suppose 1 Lakh means we can deduct the dues, whatever they are, from his earnings and settle their balance as a final settlement and move their PF documents smoothly without violating any.
Regards,
Saro
From India, Madras
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Regards,
Saro
From India, Madras
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